<t>The derivation looks fine to me... although you can make it simpler by just writing that:S1,t =S1,0 * exp{(mu1-0.5*sigma1^2)*t + sigma1*W1,t}S2,t =S2,0 * exp{(mu2-0.5*sigma2^2)*t + sigma2*W2,t}hence S2,t/S1,t = S2,0/S1,0 * exp{(mu2-mu1-0.5*sigma2^2+0.5*sigma1^2)*t+ sqrt(sigma1^2+sigma2^2)*Wt}-> (...